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| 8-K - FORM 8-K - CECO ENVIRONMENTAL CORP | d312594d8k.htm |
Exhibit 99.1
| NasdaqGM:CECE | NEWS RELEASE |
CECO ENVIRONMENTAL ANNOUNCES
FOURTH QUARTER AND FULL YEAR 2011 FINANCIAL RESULTS
Company Achieves Record Annual Earnings of $0.51 per Share
CINCINNATI, OHIO, MARCH 8, 2012 - CECO Environmental Corp. (NasdaqGM:CECE), a leading global provider of air pollution control technology and systems, today announced fourth quarter and full year financial results for the period ended December 31, 2011.
Financial highlights for the fourth quarter of 2011 compared to the fourth quarter of 2010 include:
Net sales were $37.8 million compared to $36.9 million in the comparable quarter, an increase of 2%. The Company’s strategy implemented in 2010 of intentionally pruning lower margin customer segments from its backlog affected year-over-year revenue growth;
Gross profit increased 33% to $11.3 million from $8.5 million;
Gross margin increased to 29.9% from 23.0%;
Selling & administrative expenses as a percent of sales was 19.6% compared to 18.2%;
Operating income increased 171% to $3.8 million from $1.4 million in 2010;
Operating margin increased to 10.1% from 3.9% in 2010;
Net income increased 286% to $2.7 million compared to net income of $0.7 million in 2010;
Net income per diluted share increased 240% to $0.17 compared to net income per diluted share of $0.05 in 2010;
Bookings were $37.4 million compared to $34.9 million in 2010, an increase of 7%;
Cash and cash equivalents increased to $12.7 million with no bank debt; and
Backlog as of December 31, 2011 was $54.9 million compared to $55.3 million as of September 30, 2011.
Financial highlights for the twelve months ended December 31, 2011 compared to twelve months ended December 31, 2010 include:
Net sales were $139.2 million compared to $140.6 million for the comparable period in 2010, a decrease of 1%. The decrease was primarily a result of the intentional pruning of lower margin customer segments noted above;
Gross profit increased 17% to $38.2 million from $32.7 million;
Gross margin increased to 27.4% from 23.2%;
Selling & administrative expenses as a percent of sales decreased to 18.2% from 19.6%;
Operating income increased by 148% to $12.4 million from $5.0 million in 2010;
Operating margin increased to 8.9% from 3.6% in 2010;
Net income increased 295% to $8.3 million compared to net income of $2.1 million in 2010;
Net income per diluted share increased 240% to $0.51 compared to net income per diluted share of $0.15, in 2010;
Year-to-date bookings increased by 9% to $139.8 million compared to $128.5 million in 2010.
“I am very pleased with our results for the fourth quarter and full year 2011 as CECO continues to achieve substantial improvements in its financial and operating performance,” commented CECO’s Chief Executive Officer, Jeff Lang. “The Company continues to realize the significant benefits from its focus on global growth, operational streamlining and margin expansion that we began implementing in the first quarter of 2010. In addition, we saw continued improvement in our year-over-year bookings as well as improved gross margin backlog as our domestic and global sales initiatives take effect.”
Mr. Lang continued, “CECO’s focus on favorable product mix changes, better sales price management and global expansion coupled with our team’s expertise in operational excellence should continue to generate positive returns for all shareholders in the quarters and years to come.”
CECO will host a conference call on Thursday, March 8, 2012 at 8:30 a.m. EST to review its financial results for the quarter. Conferencing details are as follows:
| Dial in number: | 866-277-1184 | |
| International dial in number: | 617-597-5360 | |
| Participant passcode: | 87583051 | |
| Replay: | 888-286-8010 | |
| International: | 617-801-6888 | |
| Passcode: | 19838198 | |
ABOUT CECO ENVIRONMENTAL
CECO Environmental is a leading global provider of air pollution control technology. Through its subsidiaries – Busch International, CECO Filters, CECO Abatement Systems, Kirk & Blum, Effox-Flextor, Fisher-Klosterman/Buell, CECO China and A.V.C. Specialists – CECO provides a wide spectrum of air quality products and services including engineered equipment, cyclones, scrubbers, dampers, diverters, RTO’s, component parts and monitoring and management services. Industries served include refining, petro-chemical, power, aluminum, steel, automotive, chemical and large industrial processes. Revenue from engineered equipment technology is approximately 75% and 25% from parts, services and aftermarket. Global Growth, Operational Excellence, Margin Expansion, Safety, and Employee Development are CECO’s core competencies and long term objectives.
For more information on CECO Environmental please visit the company’s website at http://www.cecoenviro.com.
Contact:
Corporate Information
Jeff Lang, CECO Environmental Corp.
Email: investors@cecoenviro.com
1-800-333-5475
CECO ENVIRONMENTAL CORP.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(unaudited)
Dollars in thousands, except per share data
| THREE MONTHS ENDED DECEMBER 31, |
TWELVE MONTHS ENDED DECEMBER 31, |
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| 2011 | 2010 | 2011 | 2010 | |||||||||||||
| Net sales |
$ | 37,752 | $ | 36,945 | $ | 139,192 | $ | 140,602 | ||||||||
| Cost of sales |
26,453 | 28,436 | 101,024 | 107,949 | ||||||||||||
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| Gross profit |
11,299 | 8,509 | 38,168 | 32,653 | ||||||||||||
| Selling and administrative |
7,401 | 6,726 | 25,359 | 27,512 | ||||||||||||
| Amortization |
100 | 123 | 441 | 501 | ||||||||||||
| Loss (gain) on sale of operating equipment |
0 | 212 | 0 | (396 | ) | |||||||||||
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| Income from operations |
3,798 | 1,448 | 12,368 | 5,036 | ||||||||||||
| Other income, (expense) net |
56 | (14 | ) | 492 | (135 | ) | ||||||||||
| Interest expense (including related party interest of $60 and $57, and $237 and $228, respectively) |
(267 | ) | (283 | ) | (1,137 | ) | (1,225 | ) | ||||||||
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| Income from continuing operations before income taxes |
3,587 | 1,151 | 11,723 | 3,676 | ||||||||||||
| Income tax expense |
805 | 363 | 3,411 | 1,371 | ||||||||||||
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| Income from continuing operations |
2,782 | 788 | 8,312 | 2,305 | ||||||||||||
| Income (loss) from discontinued operations, net of tax |
(40 | ) | (45 | ) | (40 | ) | (200 | ) | ||||||||
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| Net income |
$ | 2,742 | $ | 743 | $ | 8,272 | $ | 2,105 | ||||||||
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| Per share data: |
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| Basic income from continuing operations |
$ | 0.19 | $ | 0.06 | $ | 0.58 | $ | 0.16 | ||||||||
| Basic income (loss) from discontinued operations |
0.00 | (0.01 | ) | 0.00 | (0.01 | ) | ||||||||||
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| Basic net income |
$ | 0.19 | $ | 0.05 | $ | 0.58 | $ | 0.15 | ||||||||
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| Diluted income from continuing operations |
$ | 0.17 | $ | 0.05 | $ | 0.51 | $ | 0.16 | ||||||||
| Diluted income (loss) from discontinued operations |
0.00 | 0.00 | 0.00 | (0.01 | ) | |||||||||||
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| Diluted net income |
$ | 0.17 | $ | 0.05 | $ | 0.51 | $ | 0.15 | ||||||||
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| Weighted average number of common shares outstanding: |
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| Basic |
14,523,776 | 14,318,739 | 14,386,410 | 14,308,130 | ||||||||||||
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| Diluted |
17,109,306 | 17,118,416 | 17,115,284 | 17,102,357 | ||||||||||||
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CECO ENVIRONMENTAL CORP.
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited)
Dollars in thousands, except per share data
| DECEMBER 31, 2011 |
DECEMBER 31, 2010 |
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| ASSETS | ||||||||
| Current assets: |
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| Cash and cash equivalents |
$ | 12,724 | $ | 5,792 | ||||
| Accounts receivable, net |
23,109 | 26,772 | ||||||
| Costs and estimated earnings in excess of billings on uncompleted contracts |
10,643 | 8,345 | ||||||
| Inventories, net |
4,344 | 4,432 | ||||||
| Prepaid expenses and other current assets |
2,650 | 2,509 | ||||||
| Assets held for sale |
0 | 526 | ||||||
| Current assets of discontinued operations |
0 | 76 | ||||||
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| Total current assets |
53,470 | 48,452 | ||||||
| Property and equipment, net |
5,651 | 5,880 | ||||||
| Goodwill |
14,661 | 14,713 | ||||||
| Intangibles – finite life, net |
526 | 966 | ||||||
| Intangibles – indefinite life |
3,218 | 3,225 | ||||||
| Deferred income tax asset, net |
848 | 602 | ||||||
| Deferred charges and other assets |
971 | 953 | ||||||
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| $ | 79,345 | $ | 74,791 | |||||
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| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
| Current liabilities: |
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| Accounts payable and accrued expenses |
$ | 13,569 | $ | 17,041 | ||||
| Billings in excess of costs and estimated earnings on uncompleted contracts |
9,647 | 7,810 | ||||||
| Accrued income taxes |
393 | 1,646 | ||||||
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| Total current liabilities |
23,609 | 26,497 | ||||||
| Other liabilities |
3,146 | 2,320 | ||||||
| Convertible subordinated notes (including related parties notes of $3,950) |
9,600 | 10,800 | ||||||
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| Total liabilities |
36,355 | 39,617 | ||||||
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| Shareholders’ equity: |
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| Preferred stock, $.01 par value; 10,000 shares authorized, none issued |
— | — | ||||||
| Common stock, $0.01 par value; 100,000,000 shares authorized, 14,617,417 and 14,456,659 shares issued in 2011 and 2010, respectively |
146 | 144 | ||||||
| Capital in excess of par value |
44,249 | 43,237 | ||||||
| Accumulated earnings (deficit) |
1,301 | (6,243 | ) | |||||
| Accumulated other comprehensive loss |
(2,350 | ) | (1,608 | ) | ||||
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| 43,346 | 35,530 | |||||||
| Less treasury stock, at cost, 146,820 and 137,920 shares in 2011 and 2010, respectively |
(356 | ) | (356 | ) | ||||
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| Total shareholders’ equity |
42,990 | 35,174 | ||||||
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| $ | 79,345 | $ | 74,791 | |||||
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This press release may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All forward-looking statements are subject to certain risks, uncertainties and assumptions. These risks and uncertainties, which are more fully described in CECO’s Annual and Quarterly Reports filed with the Securities and Exchange Commission, and include, but are not limited to: our dependence on fixed price contracts and the risks associated
therewith, including actual costs exceeding our estimates and our method of accounting for contract revenue; our history of losses and possibility of further losses; fluctuations in operating results from period to period due to seasonality of our business; the effect of growth on our infrastructure, resources, and existing sales; our ability to expand our operations in both new and existing markets; the potential for contract delay or cancellation; the potential for fluctuations in prices for manufactured components and raw materials; the impact of federal, state or local government regulations; economic and political conditions generally; and the effect of competition in the air pollution control and industrial ventilation industry. Should one or more of these risks or uncertainties materialize, or should the assumptions prove incorrect, actual results may vary in material aspects from those currently anticipated. We caution investors that other factors might, in the future, prove to be important in affecting our results of operations. New factors emerge from time to time and it is not possible for management to predict all such factors, nor can it assess the impact of each such factor on the business or the extent to which any factor, or a combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. Investors are further cautioned not to place undue reliance on such forward-looking statements as they speak only to our views as of the date the statement is made. Except as required by law, we undertake no obligation to publicly update or revise any forward-looking statements, whether because of new information, future events or otherwise.